Marina Coast Water District warns it could sue over desal plan

A Marina Coast Water District attorney has notified the district's former desalination partners that it could sue and warned they should not destroy any evidence.

In letters to attorneys for Monterey County, the county Water Resources Agency and California American Water, Marina Coast attorney Mark Fogelman wrote that the district "may have claims against" the county and Cal Am related to the regional desalination project and its alternatives.

The letters, dated March 27, don't "formally assert claims, but will serve as notice that (Marina Coast) may assert such claims." It informs the former partners "of the duty to preserve all relevant evidence" from Jan. 1, 2010, to the present.

The county and Cal Am are warned to "immediately suspend" destroying documents or deleting electronic records and to place a "litigation hold" on records to ensure their preservation.

Jim Heitzman, general manager of Marina Coast, said the letters don't indicate the water district intends to sue, but is merely an attempt to preserve its rights. Heitzman said the district spent about $10 million on the desal project and still believes it is viable.

"We don't want to sue Cal Am or the county," Heitzman said. "We'd much rather work things out."

Heitzman said the district board didn't approve the letter but long ago gave him the authority to protect the district's interests. If the district sues, the board would need to approve such an action.

Meanwhile, attorneys for former county water board member Steve Collins are seeking county records in connection with conflict of interest charges against him.

On Wednesday, Collins appeared in court, where Judge Pamela Butler confirmed his preliminary hearing on nearly three dozen felony charges is set for April 17.

Butler said the court will need to address issues surrounding more than a dozen subpoenas sent to the county by defense attorney Mike Lawrence.

County Counsel Charles McKee acknowledged receipt of the subpoenas and said they include "very broad categories" of records involving the Board of Supervisors, the County Counsel's Office, and the Water Resources Agency and its former general manager, Curtis Weeks.

McKee said the subpoenas probably include many documents that are "irrelevant or privileged," and thus not subject to disclosure.

Collins has pleaded not guilty to 33 felony counts and six misdemeanors alleging he accepted payment for work he didn't do or shouldn't have been paid for as a public official.

Two felony counts are related to work he did on behalf of the desalination project. He is accused of having a financial interest in three project agreements that he helped create.

Collins was paid $160,000 by the private firm RMC Water and Environment for work on the $400 million desalination project while he was on the water board.

RMC was subsequently awarded the $28 million project management contract.

Collins also faces 31 counts of felony grand theft under false pretenses for being paid by Ocean Mist Farms over 2½ years for work prosecutors allege he never did.

In addition, Collins faces six misdemeanor counts for accepting payments from Ocean Mist that he wasn't entitled to as a public official for attending a series of water board-related meetings.

He could face up to three years in state prison on each felony conflict of interest and grand theft charge, as well as up to a year in prison for each misdemeanor charge.

Collins and his attorneys have insisted he was recruited by county officials to work on the now-failed project, which was designed to provide a replacement source of water for Peninsula customers facing a state-ordered cutback in pumping from the Carmel River and Seaside basin.

They argue Collins was assured there would be no conflict of interest.

No other public officials or private individuals have been charged in connection with the allegations against Collins, but the state Fair Political Practices Commission is conducting its own investigation of Collins and other public officials, including Weeks, Heitzman, Assistant County Counsel Irv Grant and all five county supervisors.